Tickets sold at the wrong price

[anme]

I have a question... if a passenger is sold a ticket at an incorrect, lower price than the correct value, is that ticket valid and could the passenger subsequently be charged extra, e.g. if a guard noticed that the price printed on the ticket was wrong?

I am aware of two occasions when this happened:

1. After the annual price rises one year, a single machine (of many) at a station I use continued to sell tickets at the old, lower prices for about a month. This clearly didn't go unnoticed by passengers, as the machine often had a queue even when the machine next to it (which charged the new, correct prices) was not being used.
Are the following situations different?
- A passenger deliberately uses the machine because they know it is selling tickets at an incorrect, lower price.
- A passenger randomly uses the machine to buy a ticket without knowing the correct price.

2. I bought a ticket from a guard using a network railcard. The ticket was handwritten and the guard applied the discount incorrectly in my favour. I didn't notice at the time, but I later swapped the handwritten ticket for one with a magnetic strip and, after some confusion, was told that the price was wrong. Nevertheless, they did issue the replacement ticket with the incorrect price printed on it, and did not charge me the difference.

I would assume the tickets are valid, as the passenger has bought them in good faith (*) and paid the price that was asked. Had they known the correct, higher price, they might have chosen not to travel. Is this correct?

(*) The situation of someone deliberately using the machine selling tickets at the lower price is arguably not 'good faith', but it would presumably be hard to prove otherwise.

 

[John @ home]

could the passenger subsequently be charged extra, e.g. if a guard noticed that the price printed on the ticket was wrong?

I won't take a view on the more general questions raised by anme, where the answers will depend on the particular circumstances of each case. But I am very clear that a passenger cannot be charged extra if a guard notices that the price printed on the ticket is "wrong". This is due to the inconsistent way in which the train companies reflect price reductions on train tickets. Two examples will illustrate this:

• On 18 July 2013 I used a "£10 off" offer from East Coast to travel from Grantham to Retford. I paid 50p. The price shown on the ticket is £0.50.
• On 1 August 2013 I used a "£10 off" offer from East Midlands Trains to travel from London to Leeds. I paid £20.35. The price shown on the ticket is £30.35.

It is clear to me that nothing may be inferred from the price shown on the ticket while both these practices are allowed. I would be interested to learn from one of the forum's accountants whether it is possible for both to accord with current professional standards.

 

[LexyBoy]

Excesses would be another example, as the methods used to calculate them often differ from the "correct" way. I recently got a couple of tickets overdistanced and the excesses were calculated differently between the two, despite being done at the same time by the same person!

A misapplied season ticket renewal discount could also result in a lower price charged than the correct one.

 

[Haywain]

The ticket should be honoured, in the same way as a ticket sold with reservations for a time when it should not be valid would be honoured. However, if you later want to excess the ticket you should expect to lose your saving at the same time as the excess would be from what you paid to the correct price. Similarly, for the ticket with the 'invalid' reservation, it would not be accepted on a different (restricted) train.

 

[OLJR]

I would make the case that a ticket issued under a clear mistake fare would not be valid.

If you buy a 1ST open return from King's Cross to Newcastle for GBP 395 (actual price GBP 415) a reasonable person could believe that the fare is correct. However if you buy an open return for GBP 125 this would be clearly a mistake and the ticket would (in fact "should" in my view) not be valid.

However now that many TOCs are using revenue management on their Advance tickets it might be difficult to determine what exactly constitutes a clear mistake. I consider that a reasonable person does not necessarily know that Advance tickets are available to purchase only before 6pm the day ahead.

My 1ST Advance tickets from King's Cross to Newcastle usually cost GBP 44.50 each way. If a friend who knows this and little else about the price of rail travel was presented by a GBP 125 fare at an automated ticket machine they might consider it a reasonable fare and rightly be aggrieved if the TOC believed otherwise!

 

[LexyBoy]

IANAL but - a ticket represents a contract between the passenger and the TOCs; once entered into (by payment) it is binding. I believe that the TOC would have to prove in court that the passenger using the under-charged ticket knowingly paid less than the correct fare and used the ticket in order to avoid paying the correct fare.

Plus as John@Home pointed out, the price printed does not reflect the value of the ticket or the price paid (though I would be very happy if my Season ticket cost what it claims it did!).

 

[Deerfold]

IANAL but - a ticket represents a contract between the passenger and the TOCs; once entered into (by payment) it is binding. I believe that the TOC would have to prove in court that the passenger using the under-charged ticket knowingly paid less than the correct fare and used the ticket in order to avoid paying the correct fare.

Plus as John@Home pointed out, the price printed does not reflect the value of the ticket or the price paid (though I would be very happy if my Season ticket cost what it claims it did!).

Reprint stating £0.00? I've just got one of those though they made a slight mistake in printing it meaining it now looks like a ticket costing 4 times as much (but for me having the same validity).

 

[Tetchytyke]

My view is that you go back to basic contract law.

They state on their machine what the price is. That's an "invitation to treat". You then offer an amount of money for the item (this doesn't have to be the same as what their invitation to treat is). They accept your offer by printing the ticket and taking your money.

Where there is a clear error they can refuse your offer (as happens when Amazon, Tesco, etc mistakenly stick a laptop on their website for £3.99 instead of £399, they refuse your offer and revoke the contract). But if a company accepts your offer, takes your money and prints the tickets then that ticket is your contract and it is binding.

Contract law doesn't provide for it being the "correct" price as there's no such thing as a "correct" price. As long as there's been "consideration", i.e. you give them something and they give you something, it is a valid contract. You don't have to pay what the invitation to treat price is, you are free to haggle with anyone about the cost of any contract (although the haggling at a ticket office will "take it or leave it").

The railway byelaws say you must have a valid ticket or authority to board a train and to travel, but they do not (and indeed cannot) specify what the price of that "valid ticket" is. Obviously if you buy a ticket with discounts you are not entitled to, or for a journey different to the one that you are making, then that is not "valid" as you are being dishonest or negligent. But for the cost of the ticket, especially given the complexity of the ticketing system, really my view is that contract law is what counts. You offered them money, they accepted it, end of story.

 

[island]

To be technical, the seller can generally refuse any offer, clear error or not. Amazon and the like have in their terms and conditions a statement that when you press buy, you are offering to purchase the item, and they do not accept your offer and bring a contract into play until the item is dispatched.

Where an offer has been accepted, if there is a clear mistake the contract can be rescinded. This applies in the railway industry as much as any other.

 

[Tetchytyke]

I'd agree with that. Acceptance of an offer is generally where the goods are despatched, not before. And yes, you can reject an offer for any reason.

In the case of a ticket machine, you'd have to argue that the goods have been despatched when the bit of orange cardboard gets spat out the bottom.

 

[maniacmartin]

There are no 'goods' with rail travel, only services. The ticket is not what you're buying, it's just there to prove the contract exists. In my view, the ticket is the contract, issued subject to terms referenced on the back (usually the NRCoC). If so, the contract must exist, and at the price paid, surely?

 

[Haywain]

I'd agree with that. Acceptance of an offer is generally where the goods are despatched, not before. And yes, you can reject an offer for any reason.

In the case of a ticket machine, you'd have to argue that the goods have been despatched when the bit of orange cardboard gets spat out the bottom.

And given that the ticket remains the property of the railway, that's not a strong position to argue from. However, as I stated earlier, it is likely that the ticket would be honoured.

Still, if acceptance of the offer is when the goods are despatched or the service is provided, that suggests that on another thread where Megatrain cancelled the service, they would be on strong ground.

 

[John @ home]

• On 18 July 2013 I used a "£10 off" offer from East Coast to travel from Grantham to Retford. I paid 50p. The price shown on the ticket is £0.50.
• On 1 August 2013 I used a "£10 off" offer from East Midlands Trains to travel from London to Leeds. I paid £20.35. The price shown on the ticket is £30.35.

East Coast's practice appears to have changed.

Today I collected a "£10 off" offer ticket from East Coast for travel from London to Leeds. I paid £45.85. The price shown on the ticket is £55.85.

 

[yorkie]

I would make the case that a ticket issued under a clear mistake fare would not be valid.

I take the opposite view, as it still forms a contract. Also it would be almost impossible to the casual traveller to be sure of what was a "mistake", given that you can obtain some fares for a very low price.

Very low fares include Virgin Trains for £1 (I did York-London for £4 return, splitting at Tamworth/Birmingham), unlimited EMT travel for 1 day for £10, unlimited Northern travel for 1 day £10, Chiltern 50p single tickets, and so on...

So even if the fare for a long-distance journey was 50p or £1, it is NOT a "clear mistake", as the above fares were intentional. It may be a "mistake" and it may be "clear" to the pricing manager of the Company, but that doesn't matter in my view.

If you buy a 1ST open return from King's Cross to Newcastle for GBP 395 (actual price GBP 415) a reasonable person could believe that the fare is correct. However if you buy an open return for GBP 125 this would be clearly a mistake and the ticket would (in fact "should" in my view) not be valid.

I disagree. £125 is still far more than I would pay for a 1st class return from King's Cross to Newcastle!

An Off Peak Single on this route is half price if bought online (as long as it's by the end of the previous day).

However now that many TOCs are using revenue management on their Advance tickets it might be difficult to determine what exactly constitutes a clear mistake. I consider that a reasonable person does not necessarily know that Advance tickets are available to purchase only before 6pm the day ahead.

Or even 23:59 in the case of some TOCs, including East Coast.

My 1ST Advance tickets from King's Cross to Newcastle usually cost GBP 44.50 each way. If a friend who knows this and little else about the price of rail travel was presented by a GBP 125 fare at an automated ticket machine they might consider it a reasonable fare and rightly be aggrieved if the TOC believed otherwise!

Absolutely, you appear to have changed your opinion as the post has gone on.... and for the better in my view

 

[jkdd77]

And given that the ticket remains the property of the railway, that's not a strong position to argue from. However, as I stated earlier, it is likely that the ticket would be honoured.

Still, if acceptance of the offer is when the goods are despatched or the service is provided, that suggests that on another thread where Megatrain cancelled the service, they would be on strong ground.

In the case of rail travel, the contract is entered into when the ticket is purchased and money changes hands (whether electronically or otherwise), at which point there has been an offer, consideration, acceptance, and an intention to create legal relations.

In the case of 'Megatrain' tickets, the NRCoC (Introduction, Condition 1 and Condition 64) both make clear that the contract entered into is between the passenger and the TOC, and that the contract (if not bought in Scotland for travel wholly in Scotland) is governed by English law, with Megatrain merely acting as agent. Furthermore, the Ticketing and Settlement Agreement specifically obliges the TOC to honour its contracts for travel if able to do so.

When you buy a ticket to travel on scheduled services on the National Rail Network you make an agreement with the Train Companies whose trains the ticket allows you to use...
A ticket that has been issued to you is evidence of a contract between you and each Train Company whose trains you have the right to use. Where the company selling you the ticket is not one of the Train Companies on whose services you are travelling, the seller is acting as agent for the Train Company or Companies in whose trains you are entitled to travel.

Equity suggests that it would be unjust to create an unequal position where a passenger who overpays or otherwise makes a mistake with the ticket they purchase with their purchase is stuck with their contract (as members of rail staff have been eager to point out), yet a TOC is free to cancel a contract simply because it is inconvenient for them.

This law article from the University of Cambridge's law department: www.law.cam.ac.uk/faculty-resources/10000256.pdf+&cd=6&hl=en&ct=clnk&gl=uk
suggests that:
1) false pricing of the ticket may amount to a criminal offence;
2) under the case of Tamplin v James (1880) 15 Ch D 215, where a person enters a contract on the basis of a mistake that was not induced by the other party to the contract, specific performance will be normally be awarded against that person (i.e. the contract is normally binding) and it was also suggested, in obiter dicta, that even if specific performance had not been awarded, the person would nonetheless have been entitled to damages instead;
3) under the case of Hartog v Colin & Shields [1939] 3 All ER 566, which dealt specifically with a underpriced good due to a pricing error, the test appears to be whether the purchaser knew, or ought reasonably to have known, that the offer did not express the real intention of the person making it (and was therefore a mistake), in which case the contract is vitiated.

In this specific case, the Court held that the purchaser could not reasonably have supposed that the offer expressed the real intention of the person making it, and must have been aware it was a mistake. The purchaser therefore did not, by his acceptance of the offer, make a binding contract with the seller. This would give an online retailer a defence if the price of a product was so ludicrously low that the intention to create legal relations could not be formed.

In the case of rail travel, the complexity and perversity of ticket pricing, combined with the wide availability of various discounts, promotions, etc, (including genuine £1 tickets for long-distance rail travel) would make it harder for the TOC to argue that the passenger ought reasonably to have known that the offer did not reflect the real intention of the person making it.

Crosscountry have been known to run promotions where their advance tickets are sold at 'last year's prices', East Coast have been known to sell promotional £25 first class (advance) tickets from London to Inverness, and some TOCs have been known to actually freeze (or even cut) certain walk-up ticket prices on some flows (usually in order to 'make room' for bigger increases elsewhere!). As already mentioned, the price listed on the ticket does not necessarily represent the actual amount paid, and the pricing of advance tickets means that a passenger may well pay less for travelling further, further detaching the price paid from the "quantity" (so to speak) of the service provided.

All of this would make it very difficult for TOCs in general to argue that a passenger who buys a 2014 ticket at 2013 prices either knew or ought reasonably to have known that this was a mistake, all the more so still since the price is presumably still a "reasonable" one and not ludicrously low. Even if the price was extremely low, the passenger *might* be able to argue that they reasonably believed that it was just another promotion.

 

[anme]

Hey, thanks for reviving my dead thread.

To summarise and apply to my examples:
1. If the passenger buys the ticket in good faith, and the price could "reasonably" be assumed to be correct (however that is defined), the ticket is valid without further payment.

2. If the passenger buys in the ticket in bad faith (for example, from a faulty ticket machine, knowing that machine to be offering the wrong prices), they could theoretically be charged extra. However, it would be extremely hard to prove that the passenger acted in bad faith, so in reality the situation is likely to be the same as 1.

3. If the passenger buys a ticket at an "obviously" wrong price, that would be evidence bad faith and the ticket may not be valid. However, it is hard to establish what is an "obviously" wrong price given the highly variable fares charged for the same journey. There could be examples that are obviously wrong - e.g. if an annual season ticket is sold for a few pounds, and I suspect the TOC would try to recover the lost revenue in that case, at least for the remaining validity period of the ticket.

4. The price printed on the ticket does not always reflect the price paid for the ticket. This would make it much harder for a TOC to take any action.

 

[yorkie]

Given that price does not determine validity, and long distance tickets have been available for £1 (e.g. York - Birmingham) or 50p (e.g. Birmingham - London) then any price would be seen as reasonable to me.

I was once offered York - Newcastle for 10p, so I booked it, but the ticket wasn't issued. After some conversations, I was offered a free 1st class ticket from anywhere to anywhere.

 

[anme]

Given that price does not determine validity, and long distance tickets have been available for £1 (e.g. York - Birmingham) or 50p (e.g. Birmingham - London) then any price would be seen as reasonable to me.

I was once offered York - Newcastle for 10p, so I booked it, but the ticket wasn't issued. After some conversations, I was offered a free 1st class ticket from anywhere to anywhere.

For a single or return journey, I tend to agree. Could there be cases where it could be demonstrated that someone *knew* they were getting a ticket for the wrong price, and would this make a difference? Clearly some people know the ticket machine in my first post was using the wrong prices, given the long queues to use it. Although this is evidence of "collective bad faith" - lots of people clearly knew the machine was using the wrong prices; rather than bad faith by any individual - who could plausibly claim they didn't know.

Do you think a season ticket could be different? It is harder for someone to argue that a few pounds is "reasonable" for a ticket normally costing several thousand.

 

[Tetchytyke]

It would be very easy to argue that a passenger didn't know the machine was issuing tickets at incorrect fares, even with the queues. There's always a herd mentality and "the other machines looked like they were out of order" would very probably win.

Season tickets probably would be different, but it depends on what the machine charged. If it is clear the pricing is wrong then there is no contract, just as when Tesco accidentally stick a laptop on their website for £2.99 instead of £299